Graced with high oil prices, Syria has traded in its policy of financial austerity for heavy spending, aiming to rekindle growth in a country long known for its stagnating economy. President Bashar al-Assad formally approved on Tuesday a government budget of 322 billion Syrian pounds (seven billion dollars) for 2001, a leap of 16.9 percent from this past year's budget.

”This budget demonstrates the government's concern with bolstering credit for development projects, reactivating the economy and stimulating markets," Finance Minister Khaled Mahayani said. According to Mahayani, half of the funds, 161 billion Syrian pounds ($3.5 billion) were earmarked for new projects in agriculture, irrigation, mining, as well as public services, most notably electricity, water and transportation.

The public spending allocation is 22 percent more than in 2000 when the government offered only 132 billion Syrian pounds ($2.8 billion). "The policy of austerity, which the government has followed since 1985, due to the cutting off of financial aid from the Gulf States to Syria, has come to an end," financial consultant Samir Seifan said.

Syria's economy is in dire need of resuscitation. Last year, Syria posted a dismal one percent rate for economic growth, said Seifan. The past 15 years of tight spending manifested itself through unpopular measures such as the lowering of government subsidies and hikes in taxes and custom duties.

According to Seifan, this past year's global rise in oil price has allowed the state to pursue a more liberal spending policy. The government set its budget for 2000, based on a conservative value of $20 per barrel of oil. During the course of the year, oil prices surpassed $25, Seifan said. For 2001, the government has calculated its budget on an estimated oil price of $24 per barrel. Syria produces 600,000 barrels of oil per day, of which 320,000 barrels are exported.

Perhaps Syria's greatest reason to increase spending is the country's growing population. Syria has one of the highest population growth rates in the world, with an average rate of around three percent in the last few years.

Experts suggest that the country needs to create 200,000 jobs per year to keep up with the size of its population. The Syrian government has said that unemployment hits hardest first-time job seekers between 15 and 24 years old as well as the illiterate. The government has indicated that it aims to create 65,939 jobs in 2001, of which 37 percent will be administrative and 63 percent will be in state-owned businesses.

Since October, the government has adopted a new program to tackle unemployment, investing 50 billion Syrian pounds (one billion dollars), in the creation of 440,000 jobs over five years. Unemployment is officially estimated at 9.5 percent in Syria. Experts place the number closer to 20 percent. — (AFP, Damascus)